Bankruptcy may seem like a one-and-done cure-all for all your financial troubles, but there are actually a surprising number of different kinds of debt you can’t lose in bankruptcy – even if you’re filing for Chapter 7 bankruptcy. Below are just a few examples.
In most cases, taxes, penalties, customs, or any other government debts you’ve acquired cannot be discharged in bankruptcy. However, special circumstances may apply, so make sure you speak with your bankruptcy attorney about these debts.
Alimony & Child Support
There is no type of bankruptcy that allows for the forfeit of a person’s responsibility to make their alimony or child support payments.
If you thought you could go to college, and then immediately declare bankruptcy to wipe your slate clean early in life, you’re gravely mistaken. Student loans are only ever discharged in extreme situations in which a person is determined by the court to have already done everything they could possibly do to keep current on their payments.
Sadly, your home mortgage and/or other property liens cannot be discharged along with your other debt no matter which type of bankruptcy you file. In fact, if your income is deemed too low to qualify for a Chapter 13 bankruptcy, your home or property may even be foreclosed upon to help cover the cost of your other debts.
Like a home mortgage, auto loans cannot be discharged during bankruptcy, and may even be at risk of liquidation depending on the type of bankruptcy you file. Fortunately, if you want to keep your car, all you have to do is “reaffirm” your auto loan and continue making your payments in full, and on time.
If you owe money for any sort of criminal charges, including those related to larceny, fraud, embezzlement, drunk driving, or any other “willful and reckless acts,” these debts cannot be discharged.
New Credit Card Debt
Just because you’re planning to file for bankruptcy, doesn’t mean you can go on one last shopping bender before you go clean for good. Any recent charges or purchases you make can be seen and scrutinized by the very people who determine whether or not you’re even allowed to file for bankruptcy – and how do you think that judge is going to feel when you plead with him about not being able to pay off medical bills when you just wracked up another several hundred dollars in credit card debt on fancy restaurants and new shoes?
Debt That’s Not Yours
You’d be surprised at how many times people try to file for bankruptcy, and have debt discharged, only to find out that the debt in question isn’t even in their name. If you are divorced or think there is any possibility your debt is not your own, make sure you discuss it with your bankruptcy attorney to avoid any unnecessary hassle.
For more information regarding your unique situation, such as which debts you will and will not be able to discharge, we urge you to get in touch with our remarkable bankruptcy attorneys at Church and Korhonen, PC, today. Call Church and Korhonen, PC, toll-free at 1.800.758.5611 or simply fill out the form in the sidebar to begin taking steps to a more sound financial future, greater peace of mind and a fresh start.